What’s covered and what’s not

When vehicles in use for business pertaining to a sports organization are involved in an accident where the passengers or other third parties are injured, the sports organization may be vicariously liable. This means they can be included in any lawsuits arising out of the accident. Injured parties often seek out the sports organization as a deep pocket when the owner of the vehicle is uninsured or underinsured.

This is why sports organizations need Non-owned and Hired Auto Liability to cover their liability arising out of the use of vehicles that are not titled to the sports organization.

A non-owned auto is an auto that is not owned by the sports organization but is instead owned by an employee or volunteer who runs errands or transports participants at the direction of an authorized league official. Sports organizations benefit from the use of non-owned vehicles.

Non-owned Auto Liability covers the sports organization itself but does not normally cover the individual vehicle owner or driver. Individual vehicle owners or drivers must look towards their own Personal Auto Policy for coverage.

A hired auto is either borrowed (ex: church van or school bus) or leased from a rental car company. Hired Auto Liability protects both the sports organization and driver from liability arising from an auto accident when a vehicle is borrowed or leased. It is important to note that Hired Auto Liability does not provide any coverage for damage to the rental vehicle itself.

Non-owned and Hired Auto Liability can be obtained on either a Business Auto policy or a General Liability policy. However, the insurance carriers are reluctant to write these coverages for sports organizations due to the potential for high severity and the fact that sports organizations typically don’t implement loss control protections.

Basic loss control protections include driver screening by obtaining acceptable Motor Vehicle Reports and requiring that employees provide evidence that they carry a Personal Auto Policy with limits of at least $300,000 combined single limits. In addition, many insurance carriers are reluctant to extend coverage on the rental of 15-passenger vans due to their documented propensity for tipping over.

The actual policy language must be carefully reviewed for these restrictions.